Business & Economics
India-EU Seal 2-Billion-Person Free-Trade & Security Accord After 18-Year Talks
On 28 Jan 2026 New Delhi and Brussels declared negotiations finished on a sweeping FTA that slashes duties on 93 % of Indian exports and phases in duty-free access for over 90 % of EU goods, locking the two economies into the largest bilateral trade zone either has ever signed.
Focusing Facts
- India will cut the import tariff on up to 250,000 European cars a year from 110 % to 10 % over a decade while the EU drops its average tariff on Indian goods from 3.8 % to 0.1 %.
- Talks launched June 2007, halted 2013, revived June 2022 and formally concluded 28 Jan 2026 alongside a first-ever India-EU Security & Defence Partnership.
- EU’s Carbon Border Adjustment Mechanism already in force (1 Jan 2026) will still apply to Indian steel and aluminium, commodities whose exports to Europe have fallen from $7 bn to $5 bn in two years.
Context
The deal echoes the 2018 EU-Japan Economic Partnership Agreement, another response to U.S. trade unilateralism, but on a larger demographic scale and with the added twist of a parallel defence pact—something last seen when the U.S. paired security guarantees with trade in post-war GATT rounds. Structurally, it signals three converging trends: (1) the splintering of the U.S.-centred trading system as partners hedge against 50 %-plus Trump tariffs; (2) Europe’s attempt to de-risk from China while India positions itself as an alternative manufacturing base; (3) the entrenchment of climate-linked non-tariff barriers such as CBAM, which could offset headline tariff gains and foreshadow carbon-based protectionism worldwide. Whether this moment matters in 2126 depends on execution: if India translates market access into industrial upgrading—much as South Korea did after entering the GATT in 1967—it could accelerate its long-predicted ascent to a top-three economy and pull Europe’s ageing manufacturers into its orbit. If, however, regulatory frictions, CBAM fees and domestic backlash mimic the stalled Trans-Pacific Partnership of the 2010s, the pact may be remembered as another grand but hollow gesture in the slow re-wiring of global trade blocs.
Perspectives
Indian pro-government and business-friendly media
Indian pro-government and business-friendly media — The FTA is a landmark, mutually beneficial pact that will turbo-charge India’s manufacturing, exports and strategic clout while giving Europe growth it sorely needs. Coverage lauds Prime Minister Modi’s deal-making and skims over carbon-tax headaches or domestic job losses, reflecting commercial boosterism and political alignment with the ruling BJP.
Indian opposition-aligned outlets highlighting Congress concerns
Indian opposition-aligned outlets highlighting Congress concerns — The agreement risks swelling India’s trade deficit and letting the EU’s carbon tax and strict standards wipe out gains for steel, aluminium, EVs and pharma. Critiques foreground every possible downside to undercut the government’s triumphal narrative, so economic worries may be amplified for partisan effect.
International media critiquing Trump’s trade policy
International media critiquing Trump’s trade policy — Europe and India struck the ‘mother of all deals’ chiefly as a reaction to President Trump’s tariff wars, signalling a new trade order that sidelines the US. By casting the pact mainly as a rebuke to Washington, these reports can downplay the partners’ own long-term interests and exaggerate America’s isolation for domestic political commentary.